September 9, 2013

Auditor: Crack down now on Winthrop public finances oversight

'When we start seeing ATM withdrawals on these accounts, when we start seeing no justification for these expenses with public funds, it's alarming to us,' auditor says

By Craig Crosby ccrosby@centralmaine.com
Staff Writer

WINTHROP — The auditor assigned to look into the schools' accounting practices described tonight a system that is in need of greater transparency and better control of those who are allowed to spend public funds.

Ron Smith of Buxton-based RHR Smith & Company said town and school officials should begin as soon as today the process of developing proper oversight of a number of school and town accounts that currently leave hundreds of thousands of dollars suspectible to spending without proper oversight.

"When we start seeing ATM withdrawals on these accounts, when we start seeing no justification for these expenses with public funds, it's alarming to us," Smith said.

Tension between municipal and school officaisl has been mounting since June, when an auditor flagged problems with school accounts. Town councilors froze the accounts to prevent spending without council approval.

Councilors in July rejected the school board's 2013-14 budget proposal, which was about $500 less than the 2012-13 budget. Councilors said they could not approve a budget until the auditor's final report. Smith today voiced support for that stand.

"Our position is, how do you feel good about passing this budget when you really don't know ... the state of the school (finances)?" Smith said.

Smith paid special attention to the pay-to-play students accounts at the middle and high schools.

The accounts were established in 2011 to ease pressure on the budget. The money is collected by the schools, but the town has subsidized the account by about $30,000 each year, with the understanding that the schools would reimburse the town. Those reimbursements have not been made, Smith said. As a result, he argued, there should be about $50,000 to help lower the tax rate.

"This is the talk that needs to happen tomorrow morning between the town and the school," Smith said.

While awaiting budget approval, the school system has operated thus far on the 2012-13 school budget. Councilors have argued that the budget is larger than the board requested and should provide ample funds.

Smith said there is a process for spending money from the frozen accounts that should allow business to continue as normal, but Winthrop Superintendnet Gary Rosenthal said without an approved budget he has had to tell teachers and staff to limit spending to essentials, citing uncertainty about how much voters will agree to spend in a new budget.

"The reality is, we do not have a solidified budget," Rosenthal said. "For me to spend over and above those cost centers would be foolhardy, so I'm limited in terms of what I can spend until we have definitive numbers. By law I'm responsible for any overruns in this budget."

Council Chairman Kevin Cookson bristled at the rumors that the council's decision to freeze the accounts has hampered educators' abilities to teach effectively. He said the council has approved spending from the frozen accounts and has allowed money to moved from one account to another.

"Teachers not getting supplies because they've been told accounts are frozen, it's untrue," Cookson said. "I don't want rumors going around. I'm getting calls that they can't get supplies because the school budget is frozen. It may be frozen on your side of it, but it's not because the council froze it."

Craig Crosby – 621-5642
ccrosby@mainetoday.com

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